JAMB Accounting 2014 Objective — Question 29

Question 29 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2014 Objective paper, with the correct answer and a full explanation.

Maina Merchants Trading and Profit and Loss Account (Extract): Stock(1/1/2010) 80,000; Purchases 90,000; Cost of goods available for sale 170,000; Sale 300,000; Less Returns inwards 30,000; Gross profit 150,000. Determine the closing stock.

A. N30,000
B. N40,000
C. N50,000Correct
D. N60,000

Explanation

Net sales = Cost of goods sold + Gross profit ⟹ Cost of goods sold = 270,000−150,000=N120,000. Closing stock = goods available for sale − cost of goods sold = 170,000−120,000 = N50,000.

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